Millrock Resources announces that the company has made an option to joint venture agreement concerning its Los Chinos and Los Cuarentas gold projects in Sonora State, Mexico.
Millrock President & CEO Gregory Beischer stated: "We are pleased to start this new partnership with Centerra Gold. It is a great to see a mining company aggressively acquiring and exploring properties in a challenging market and we are glad to be able to show progress in Mexico to our shareholders."
Located just 100 kilometers north of Millrock’s office in the city of Hermosillo, Mexico, the Los Chinos property is immediately adjacent to Highway 15 and south of the San Franscisco gold mine. The Los Chinos property is prospective for orogenic gold, and possibly epithermal mineralization.
Three zones of mineralization have so far been delineated by Millrock; El Camino, La Tinaja and Albercas Planned exploration work includes geological mapping, soil sampling, trenching and magnetic, and induced polarization geophysical surveys. Millrock’s crews will mobilize immediately to complete the work. Click here for a description of the project with maps.
Millrock’s Los Cuarentas property lies 160 kilometers northeast of Hermosillo and is accessed by a series of gravel roads leading from Highway 89. The Mercedez Mine, a gold mine owned and operated by Yamana Gold Inc., is situated on claims immediately adjacent to the south. A stream sediment sampling survey will be conducted as the first exploration phase.
Prior work by Millrock has indicated gold-bearing epithermal quartz veining. The main focus of current exploration will be at an area showing alteration typical of an epithermal and porphyry mineralized system. Click here for a description of the project with maps.
Under the option agreement, Centerra can earn a 70% interest by completing US$5.0 million in exploration expenditures at Los Chinos and US$2.0 million at Los Cuarentas, over a five-year period. The first year expenditure of US$420,000 for the two projects is a commitment of Centerra.
Millrock will be the exploration operator for the first two years, and longer at Centerra’s option. A modest management fee, calculated as a percentage of exploration expenditures, will be paid to Millrock to offset overhead costs.
Upon meeting the total expenditure requirement, Centerra would vest with a 70% interest and the parties would contribute pro-rata to future exploration and development. In the event that Millrock or Centerra is diluted below a 10% interest, such interest will convert automatically to a 1% NSR royalty.
The claim blocks currently comprising the two properties are also subject to a royalty in favour of Pembrook Mining Corp., the company from which Millrock purchased the claims in 2014. The agreement contains a mechanism by which additional projects may be added to the option with an attendant increase in exploration expenditure requirement.
The technical information within this document has been reviewed and approved by Gregory A. Beischer, President, CEO and a director of Millrock Resources. Mr. Beischer is a Qualified Person as defined in NI 43-101.
Millrock Resources is a premier project generator to the mining industry. Millrock identifies, packages and operates large-scale projects for joint venture, thereby exposing its shareholders to the benefits of mineral discovery without the usual financial risk taken on by most exploration companies.